loan approval- binding?

daddypig

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I am hoping that some posters may have some experience or advice for our current situation that is causing a fair amount of stress.

Have gone sale agreed on a rural property in the South West since October.

Is a 4 bed dormer on 2 acres and has a smaller 2 bed cottage in need of renovation on site. This information clearly stated in original application for mortgage.

Sale price is for 190k and we have have had ("had" being the operative word) full mortgage approval for the property.

Vauler went out and valued property at 190k but seemingly only looked at larger house.

We signed loan agreement and bank sent out mortgage pack to our solicitor pre Xmas and we were arranging all the necessary home and mortgage protection.

In the interim our solicitor asked the pack to be reissued with the correct address ( looks like mistake on banks part transcribing address from valuers handwriting) and also pointed out to bank that property was comprised in two separate folios - we weren't aware of that at this stage either.

This is were things have started to stumble.

Initially the bank said "we will only lend and take a charge over 1 folio number" and advised us to get both folios merged...not possible inthe real world according to our solicitor esp not pre sale.

Then they said the would lend the full amount for the sale but take charge over only one folio (the part containing house to be purchased obviously) provided our solicitor provided a formal letter to say both folios have clear boundaries seperate road access etc.we thought this strange that they would choose to take charge over 1 but followed their advice. In the meantime we were told to get our solicitor to request cheque drawdown. Our solicitor provided an email stating what they needed ,"that's great"mortgage advisor said ,we just need it on headed paper etc and its a " formality "then we can drawdown.

We then signed contracts and were waiting cheque.Kept hearing from mortgage advisor "get your solicitor to request cheque" and from solicitor "I have requested cheque".

Eventually after a long delay and an increasingly frustrated vendor (solicitor has held our signed contracts until all funding secured) our mortgage advisor calls to say that underwriter have decided not to lend full amount. OK...how much will they lend on same?no clear answer forthcoming.

To be clear there is no issue with our affordability here. The issue is all property related.

And so it goes back to the underwriter to decide. Shouldn't we get a new valuation to decide this I suggest ? No original valuer can do this if needed I'm told.

So I called valuer this morning - he hasn't heard from them re this issue.

At the moment it looks like small personal loan and mortgage to complete purchase which still should be OK on affordability criteria but in what ratio no-one seems to know and I'm getting the silent treatment from mortgage advisor at present who isn't responding to emails/texts and getting junior members to take phone calls.

Each delay and back and forth with the bank seems to take weeks despite prompt provision of what they request by our side.

Im afraid we might lose the sale if a firm decision isn't made quickly and have I started arranging funding with another bank. (Frustratingly mortgage advisor told us we didn't need to do this months ago)

Does anyone have any advice about what we can do to speed up the resolution and also what would the advice be if sale falls through due to bank delay given we signed a loan agreement with them pre xmas?

Its the unprofessional nature of their dealings that irks me do much.

Thanks for reading
 
1) The mortgage market is competitive so apply to a few lenders, insisting that a quick approval is essential. I get the impression that KBC is efficient.
2) It might be better going to a mortgage broker who can usually fix these problems quickly.
3) Which lender is it? It's ok to name them.
4)"I'm getting the silent treatment from mortgage advisor at present who isn't responding to emails/texts and getting junior members to take phone calls." Assuming that you are not being rude, this is completely unacceptable and his superiors would like to know. Contact the Head of Mortgages in the bank. They have targets to meet and they won't be able to meet them if their mortgage advisors are not doing their job.
 
Hi Brendan,

Thanks for your reply.

I have started the assessment process with my own bank (BOI). Good to know re KBC.

I had considered engaging a broker and friends had advised at the beginning that it would be money well spent. I had thought (naively )given we would have likely qualiified for what we needed that it wouldn't be neccessary however I gather now that their role is more than simply filling the forms for us.

The provider is EBS.

Definitely not being rude to advisor . Content and frequency of such appropriate. Unanswered calls/emails/texts really not professional in my opinion. I feel if I know what the hold up/problems are we can work towards resolving them but I can't do that if we don't know.

Can you comment on whether the loan agreement which we signed with EBS in December has any value. Nothing has changed with regard to the property we initially applied for and we informed EBS all along of its nature and they engaged their own valuer to inspect and report prior to signing the agreement with us. I have asked our own solicitor to give us an opinion but I'm really hoping for a more straightforward solution , ie completion of the funding with EBS or elsewhere.

Thanks again
 
No advice but I wouldn't be so quick to blame the mortgage advisor of not doing their job, their problem is they are avoiding you because they can't get an answer from someone in Head Office. I remember it well, customer has an issue, HO has to decide, mortgage advisor stuck in middle!
 
Can you comment on whether the loan agreement which we signed with EBS in December has any value.

No, it hasn't. The Approvals are all subject to proper inspection of the legal documents.

You might have a moral case but it's unlikely you have a legal case.

Brendan
 
Would there be specifics in the legal documents that a bank can chose to renege on their loan offer?

Surely they can't just chose to renege and quote legal documents as the reason. The property we are asking them to mortgage is as we outlined on our original mortgage application.

Appreciate your advice (especially when its not what i wish to hear)and not asking you to validate my opinion of events.
 
You would have to rely on your solicitor's advice on this.

However, your best resolution of the problem is to get the mortgage elsewhere.

Brendan
 
Surely they can't just chose to renege and quote legal documents as the reason. The property we are asking them to mortgage is as we outlined on our original mortgage application.

.

The bank are not reneging, they want a clear legal title and what you are buying has legal issues. Either your solicitor can sort that out to the banks satisfaction or you need to walk away.

Just because you signed a loan agreement it is not binding on the bank until all the conditions are met, one of those conditions is that there is a clear legal title.

You have a very good solicitor there who was clever enough to hold onto the contracts until he was sure funding was in order, which it wasn't.

Suggestion: Do you need the second folio, can you just buy the house you want and ignore the second folio with the cottage to be renovated. Or sign a separate contract to purchase that for € one euro when sale is complete on the main folio. You'd have to clear that idea with your solicitor it might have tax implications, but maybe it would be acceptable to the bank too. (trying to think out of the box here)
 
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Thanks everyone for advice so far.

We are hopefully coming to a solution with our lender now (personal loan and mortgage combo) that let's this move forward.

I will update when we get some clearer answers.
 
Just to finally update this thread.

We got our keys to our house last week. In the end we went with another lender who were able to package together a mortgage offer over both folios that our original lender couldn't. It was actually quite a quick turn around from a totally fresh application to drawdown in less than a month (BOI)despite what horror stories wed heard of delayed drawdowns.

I did manage to get our valuation fee refunded from EBS but not before I had to start an official complaint and threaten financial services ombudsman - even that part was administrated poorly.

The moral of the story for me was if you think you may have even one small complication - involve a broker from the outset. I think that as a personal customer going into a branch you could either have a very streamlined and clear process or a nightmare depending on the competence of the person you meet in the branch rather than the actual lender.

I presume broker has ways of short circuiting those issues.
 
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